Traders’ Diary: Everything you need to get ready for the week ahead

What grabbed the headlines last week?

Australia’s unemployment rate

The Australian economy added 32,000 jobs in October, pushing the jobless rate to its recent cyclical low of 3.4% and defying forecasts of 3.5% ~ 3.6%.

This is the lowest unemployment in 60 years, which indicates what we already know – that the local labour market conditions remain very tight.

The strong data has raised expectations the RBA will hike the cash rate again when its board meets on December 6.

Pay rises however are still lagging well behind the pace of inflation, with real wages dropping a record 4.2% for the year.

“And the participation rate was 0.2 percentage points below the record high of 66.7 per cent in June 2022, but 0.7 percentage points higher than before the pandemic,” said Bjorn Jarvis, a senior ABS official.
 

Fed Speak

The market was bombarded with a plethora of Fed speak last week.

Fed Vice Chair Lael Brainard briefly lifted market sentiment when she told Bloomberg that it would be appropriate for the central bank to “soon” slow its pace of rate hikes.

But she left investors in limbo by not explicitly committing to a lower rate hike in December, nor elaborating what she meant by “soon”.

Comments by Fed members Collins, Barkin and Evans were also supportive of the risk assets.

Collins said: “It is time to shift focus from how rapidly to raise rates, or the pace, to how high. And perhaps more importantly on whether a recession is necessary.”

San Francisco Fed Reserve President Mary Daly meanwhile noted that 4.75% to 5.25% is a reasonable range for the Fed to raise interest rate, higher than what futures traders are pricing in.

Fed board member Chris Waller was more dovish, saying:

“The data of the past few weeks have made me more comfortable considering stepping down to a 50-basis-point hike.”

St. Louis Fed President James Bullard was the most hawkish of the lot, revising his peak for the US Fed Funds rate.

Bullard believes that the Fed should raise rates to at least 5% to 5.25%.

“In the past I have said 4.75% to 5%. Based on this analysis today, I would say 5% to 5.25%. That’s a minimum level. According to this analysis, that would at least get us in the zone,” Bullard said.

His counterpart, Kansas City Fed Governor Esther George, echoed the sentiment and said that it’s increasingly difficult to bring down inflation without a recession.
 

EU GDP and employment, and ECB speak

Both GDP and employment rose in the EU zone during the third quarter, according to data released by Eurostat.

Seasonally adjusted GDP rose 0.2% in Q3, compared to a growth of 0.7% Q2.

On a YoY basis, EU GDP rose 2.4%.

As a comparison, GDP in the US rose 0.6% in Q3 after falling 0.1% in the second, and was 1.8% higher YoY.

Eurostat also reported the number of employed persons in the EU rose by 0.2% in Q3 compared to Q2.

On a YoY basis, third-quarter employment was up 1.5%.

President of the European Central Bank (ECB) Christine Lagarde, however, said on Friday that the risk of an EU recession has increased.

The ECB has already delivered the most aggressive rate hikes in its history after raising its cash rate by 2% in 2022.

“We expect to raise rates further,” Lagarde said.

“Ultimately, we will raise rates to levels that bring inflation back down to our medium-term target in a timely manner.”

The Economic Calendar
Monday November 21 – Friday November 25

All sources Commsec

Australia and New Zealand

TUESDAY
Week consumer confidence index
Speech by RBA governor Phil Lowe

WEDNESDAY
S&P Global purchasing managers’ index for November
Skilled job vacancies for October
RBNZ interest rates decision

THURSDAY
Detailed labour force for October
 

Global

MONDAY
China loan prime rates

TUESDAY
US weekly chain store sales
EU current accounts
EU consumer confidence index for November

WEDNESDAY
US durable goods orders for October
US purchasing managers’ index for November
US consumer sentiment for November
US new homes sales for October
US Fed Reserve minutes for the Nov 8-9 meeting
US weekly jobless claims
EU manufacturing and services PMI

THURSDAY
EU non-monetary policy meeting

The ASX IPO calendar for this week

Source: the ASX. Could change without notice.

Tiger Tasman Minerals (ASX:T1G)

Listing: 21 November
IPO: $8m at $0.20

Tiger Tasman Minerals has projects in WA and QLD focused on copper, lithium, nickel, manganese, silver, gold, base metals and industrial minerals (DMM) essential to the global clean energy transition, decarbonisation and a more sustainable future.

The projects are in proven and prospective jurisdictions including Paterson Province, Fraser Range, Earaheedy Basin, Ashburton and the Townsville region.

The Iron Skarn silver-copper-lead-zinc project (QLD), the Copper Canyon copper-gold project (WA), the Fraser Range lithium-nickel-copper project (WA), the Mt Minnie manganese project (WA), and the Crater copper-zinc-lead-silver-gold project (WA).

Lightning Minerals (ASX:L1M))

Listing: 22 November
IPO: $7m at $0.20

This explorer is focused on high-demand battery minerals including lithium, nickel, cobalt, copper and PGEs, with four project areas in WA.

Its main focus are the Dundas licences – in particular the Dundas South project which is in close proximity to Alliance Mineral Assets’ (ASX:A40) Bald Hill lithium and tantalum project, Greenstone Resources’ (ASX:GSR) Mt Thirsty cobalt-nickel project and Liontown Resources’ (ASX:LTR) Buldania/Anna lithium project.

Toubani Resources (ASX:TRE)

Listing: 22 November
IPO: $32.5m at $0.20

This resources player is focused on developing a gold platform in West Africa.

The company is primarily focused on the development of the Kobada Gold Project in Southern Mali, which has a global resource base of over 2.3 Moz of gold and the potential to produce more than 100,000 ounces of gold per annum.